Which of the Following Is Characteristic of Activity-Based Budgeting

question 111

Multiple Choice

Which of the following is characteristic of activity-based budgeting?

• A)It builds a budget for each function.
• B)It identifies only the overhead activity.
• C)It classifies costs as variable or fixed with respect to the activity output measure.
• D)It creates a budget after the fact.

---

Definitions:

Depreciation Expense

The allocation of the cost of a tangible fixed asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Installation Costs

Expenses related to setting up or installing equipment, machinery, or other assets for operational use.

Capitalize

The process of recording an expenditure as an asset on a balance sheet, rather than expensing it immediately, spreading its cost over its useful life.

Revaluation Method

An accounting practice involving the upward adjustment of an asset's value on the balance sheet to reflect current market values.